Texas Committee Passes Bill to Reform Asset Forfeiture, Close Federal Loophole in Most Situations

AUSTIN, Texas (May 3, 2017) – Last week, a Texas House committee passed a bill that would modestly reform the state’s asset forfeiture laws. However, it also closes a federal asset forfeiture loophole in most situations.

Rep. Terry Canales (D-Edinburg) prefiled House Bill 344 (HB344) last fall. The legislation would make it more difficult for the state to win asset forfeiture cases by raising the burden of proof the state has to meet from “a preponderance of the evidence” to “clear and convincing evidence” that the asset was linked to criminal activity. The new law would still allow police to seize assets without a criminal conviction.

While the reform is somewhat modest, it would represent a step forward and set the stage for more substantive reforms in the future. A similar bill was recently signed into law in Arizona.

FEDERAL LOOPHOLE

HB344 also mostly closes a loophole that allows prosecutors to bypass more stringent state asset forfeiture laws by passing cases off to the federal government under its Equitable Sharing forfeiture program. The following language shuts the loophole:

TRANSFER OF FORFEITABLE PROPERTY TO FEDERAL GOVERNMENT.

A law enforcement agency or attorney representing the state may not directly or indirectly transfer seized property to any federal law enforcement authority or other federal agency and may not coordinate with the authority or agency regarding seized property unless:

(1)  the value of the seized property exceeds $50,000, excluding the value of any controlled substance; and

(2)  the attorney representing the state determines that:

(A)  the activity giving rise to the applicable investigation or seizure is interstate in nature and sufficiently complex to justify the transfer; or

(B)  the seized property may only be forfeited under federal law.

COOPERATION IN FEDERAL FORFEITURE ACTION. A law enforcement agency or the Texas National Guard, when operating in a nonmilitary role, may not participate, assist, or cooperate in a forfeiture action brought by the federal government unless the value of the seized property subject to forfeiture exceeds $50,000, excluding the value of any controlled substance.

The inclusion of provisions barring state and local law enforcement agencies from passing off cases to the feds is particularly important. In several states with strict asset forfeiture laws, prosecutors have done just that. By placing the case under federal jurisdiction, law enforcement can bypass the need for a conviction under state law and collect up to 80 percent of the proceeds from forfeited assets via the federal Equitable Sharing Program.

For example, California previously had some of the strongest state-level restrictions on civil asset forfeiture in the country, but law enforcement would often bypass the state restrictions by partnering with a federal asset forfeiture program known as “equitable sharing.” Under these arrangements, state officials would simply hand over forfeiture prosecutions to the federal government and then receive up to 80 percent of the proceeds—even when state law banned or limited the practice. According to a report by the Institute for Justice, Policing for Profit, California ranked dead last of all states in the country between 2000 and 2013 as the worst offender. During the 2016 legislative session, the state closed the loophole.

As the Tenth Amendment Center previously reported the federal government inserted itself into the asset forfeiture debate in California. The feds clearly want the policy to continue.

Why?

We can only guess. But perhaps the feds recognize paying state and local police agencies directly in cash for handling their enforcement would reveal their weakness. After all, the federal government would find it nearly impossible to prosecute its unconstitutional “War on Drugs” without state and local assistance. Asset forfeiture “equitable sharing” provides a pipeline the feds use to incentivize state and local police to serve as de facto arms of the federal government by funneling billions of dollars into their budgets.

WHAT’S NEXT

HB344 will move to the full House for further consideration.

About Tenth Amendment Center
The Tenth Amendment Center is a national think tank that works to preserve and protect the principles of strictly limited government through information, education, and activism. The center serves as a forum for the study and exploration of state and individual sovereignty issues, focusing primarily on the decentralization of federal government power as required by the Constitution. For more information visit the Tenth Amendment Center Blog.

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